The Channel Eyes the SMB Segment — and Marketplaces?

Will telecom providers finally tap into the huge SMB market opportunity, and if so, will that come through direct sales, channel partners or marketplaces?

A recent study from Beyond Now prompts that question. Beyond Now’s recent report, “CSPs: it’s time to reacquaint yourselves with today’s SMBs,” makes the argument that smaller businesses are hungrier for technology and more willing to spend on it than previously thought. The survey of 700 decision-makers found that SMBs put 8% of their annual revenues into purchasing technology products and services. Moreover, respondents indicated that they’ll be investing more money in information and communications technology (ICT). Technology spend will increase by an average of 6% in the next year for one-half of the responding SMBs, according to Beyond Now.

But those observations comes with a catch. Beyond Now in its report argues for a marketplace-driven approach to the SMB market.

“It’s fascinating that at a time when the industry is so focused on enabling digital transformation for large enterprises, that many SMBs are already digitally transformed businesses. There is a rich vein of revenue available to CSPs if they can get their SMB value proposition right. That means building solutions around SMB needs, finding repeatable patterns and embracing digital channels that are key for developing viable business models. This involves creating a digital marketplace that can deliver the scale and automation necessary for CSPs to work with partners on delivering technology solutions that meet the diverse requirements of the SMB sector,” Beyond Now CEO Angus Ward said.

BearingPoint’s Angus Ward

It’s not shocking that a digital platform provider like Beyond Now promotes the value of marketplaces, but its claims are worth examining. Are vendors missing out on the SMB market? And if so, are partners, digital channels or both the best avenue to reach those clients?

SMB Demand

Beyond Now cited an Analysys Mason forecast that predicts SMB cloud-based technology spending will grow from $600 billion this year to $1 trillion in 2027. Managed services, infrastructure and cybersecurity highlight the cloud category; Analysys Mason says they account for 45% of SMB IT spending. However, the collaboration and business applications associated with hybrid work are on the rise. The forecast states that SMBs will move from freemium to paid versions of those products.

Beyond Now’s study concluded that SMBs adopt technology in a more sophisticated way than their reputation suggests. The survey found that 70% of SMBs are eyeing technology as a way to grow efficiency and improve their business in categories such as customer experience.

“While large enterprises still struggle with digital transformation, many SMBs are already running as digital businesses. The SMBs of today are sophisticated, technology savvy, and quite independent when it comes to technology consumption,” the report authors wrote.

The Technology Stack

Respondents listed how they value different technologies. Cybersecurity scored the highest, with 44% of SMBs saying it can offer significant value to their business. However, other technologies, including network services, scored similarly. Thirty-nine percent of respondents see network services as offering significant value to their business, and another 35% see strong value.

Source: Beyond Now: “CSPs: it’s time to reacquaint yourselves with today’s SMBs”

Ashley Rowland, partner at technology advisory firm Adaptiv Advisors, sells to the SMB segment. She said she’s seeing tech investment from that market.

Recurring Raise’s Ashley Rowland

“Over 60% of my SMBs customers have added locations, added seats, or increased bandwidth in the last year,” Rowland told Channel Futures. “They are growing and we are here repeatedly to facilitate that.”

She said small businesses show interest in using technology to …